T Vampugani AppLovin to sell its mobile gaming division for $900 million, intensifying its focus on AI-driven advertising solutions.
In a decisive move to concentrate on its burgeoning advertising technology, AppLovin has announced plans to divest its entire mobile gaming portfolio for $900 million. This strategic realignment underscores the company’s commitment to enhancing its AI-powered advertising platform, which has seen remarkable growth over the past year.
The divestiture, expected to conclude in the first quarter of 2025, comprises $500 million in cash and $400 million in equity from the undisclosed private buyer. This transaction will enable AppLovin to reallocate resources towards its core advertising business, which reported a 73% increase in revenue, reaching $999.5 million in the fourth quarter of 2024.
CEO Adam Foroughi emphasized the company’s strategic pivot, stating, “This sale allows us to focus entirely on our advertising technology, leveraging AI to deliver superior results for our clients.” The decision aligns with AppLovin’s trajectory of prioritizing high-margin ad services over content creation.
The market has responded favorably to this announcement. AppLovin’s stock surged over 20% following the news, contributing to a staggering 1,200% increase in its share price over the past year.
This growth reflects investor confidence in the company’s strategic direction and the robust expansion of its advertising segment.
However, not all feedback has been positive. Some brand marketers who have tested AppLovin’s platform noted the absence of certain key functionalities, suggesting room for improvement as the company refines its offerings.
Looking ahead, AppLovin plans to enhance its AI-driven advertising solutions, aiming to attract a broader spectrum of advertisers, including e-commerce and direct-to-consumer brands. This strategic focus positions the company to capitalize on the evolving digital advertising landscape, potentially rivaling industry giants in the near future.
